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MainStreet Bancshares Inc (MNSB)
NASDAQ:MNSB

MainStreet Bancshares (MNSB) AI Stock Analysis

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MainStreet Bancshares

(NASDAQ:MNSB)

Rating:61Neutral
Price Target:
$22.00
▲(6.13%Upside)
MainStreet Bancshares' overall stock score reflects a mixed financial performance with profitability challenges but stable revenue growth and strong cash flow generation. Technical indicators suggest bullish momentum, though caution is advised due to overbought signals. Valuation remains a concern with a negative P/E ratio, while the earnings call presents a positive outlook with strategic focus on core operations and cost management.

MainStreet Bancshares (MNSB) vs. SPDR S&P 500 ETF (SPY)

MainStreet Bancshares Business Overview & Revenue Model

Company DescriptionMainStreet Bancshares, Inc. operates as the bank holding company for MainStreet Bank that provides various banking products and services for individuals, small to medium-sized businesses, and professional service organizations. The company offers demand, NOW, money market, savings, and sweep accounts, as well as certificates of deposit; business and consumer checking, interest-bearing checking, business account analysis, and other depository services; and cash management, wire transfer, check imaging, remote deposit capture, and courier services. It also provides commercial loans, including government contract receivables, plant and equipment, general working capital, contract administration, and acquisition loans; commercial real estate, real estate construction, and residential real estate loans; and consumer loans comprising term loans and overdraft protection, as well as debit and credit cards. In addition, the company provides deposit insurance solutions; remote deposit of checks; and internet bill payment, online cash management, and online and mobile banking services. As of March 18, 2022, it operated six branches in Herndon, Fairfax, McLean, Leesburg, Clarendon, and Washington D.C., as well as 55,000 automated teller machines. MainStreet Bancshares, Inc. was incorporated in 2003 and is headquartered in Fairfax, Virginia.
How the Company Makes MoneyMainStreet Bancshares makes money through various revenue streams primarily associated with its banking operations. The company earns interest income from loans extended to businesses and individuals, which forms a significant portion of its revenue. Additionally, MainStreet Bancshares generates non-interest income from service charges on deposit accounts, fees from cash management services, and other financial products. The company strategically partners with technology providers to offer innovative banking solutions, which can contribute to fee-based income. Interest rate fluctuations and economic conditions are key factors that influence the company's earnings.

MainStreet Bancshares Earnings Call Summary

Earnings Call Date:Apr 21, 2025
(Q1-2025)
|
% Change Since: 26.63%|
Next Earnings Date:Aug 05, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted a strong start to 2025 with improvements in net interest margin and a reduction in non-performing loans. However, the discontinuation of the Avenue initiative and the nominal loan growth due to paused CRE lending represent significant challenges. Overall, the bank is focusing on core operations and cost reductions to drive shareholder value.
Q1-2025 Updates
Positive Updates
Net Interest Margin Improvement
The bank's net interest margin increased by 34 basis points from the previous quarter to 3.3%, reflecting effective balance sheet management.
Reduction in Non-Performing Loans
Non-performing loans are expected to decrease from $21.7 million to $10.5 million due to a court-approved payoff.
Strong Start to 2025
Earnings per common share were $0.25, with a return on average assets of 0.46% and a return on average equity of 4.78%.
Deposit Portfolio Growth
Non-interest-bearing and low-cost transactional deposits increased by $74 million during the quarter.
Cost Reduction Strategy
The bank anticipates a 12.5% decrease in operating expenses during the second quarter as part of its expense reduction plan.
Negative Updates
Discontinuation of Avenue Initiative
The Avenue banking-as-a-service initiative was discontinued due to misalignment with strategic priorities and increasing costs.
Nominal Loan Growth
The loan portfolio experienced nominal net growth of $1 million quarter-on-quarter, reflecting a cautious approach in the current environment.
Increase in Delinquency Numbers
There was an increase in the 30 to 89 day delinquency figures during the quarter.
CRE Lending Paused
The bank has paused investor CRE lending due to political and economic instability, impacting growth potential.
Company Guidance
During the earnings call, MainStreet Bancshares Inc. provided several key metrics and strategic updates. The net interest margin increased by 34 basis points from the previous quarter to 3.3%, reflecting positive balance sheet management. Non-performing loans remained steady at $21.7 million, with expectations of reducing this to $10.5 million following a court-approved payoff in June. The company reported earnings per share of $0.25, a return on average assets of 0.46%, and a return on average equity of 4.78%. The bank decided to discontinue its Avenue banking-as-a-service initiative to focus on the Core Bank, which aims to drive shareholder value. MainStreet Bancshares is also focusing on reducing its loan-to-deposit ratio, which stands at 96%, by managing its liquidity and funding sources effectively. Cost-cutting measures are expected to yield a 12.5% decrease in operating expenses during the second quarter, with further reductions anticipated throughout the year.

MainStreet Bancshares Financial Statement Overview

Summary
MainStreet Bancshares faces profitability challenges with negative net income and margins, though revenue growth offers a positive outlook. The balance sheet is stable but shows some leverage risks, while cash flows indicate strong operational cash generation.
Income Statement
55
Neutral
MainStreet Bancshares has seen a decline in its net income and EBIT performance in the TTM, with negative margins indicating operational challenges. However, revenue growth has been steady over the years, which provides a solid foundation for recovery if cost management improves. The gross profit margin remains positive, albeit lower than the historical average, suggesting some resilience in revenue generation despite profitability issues.
Balance Sheet
60
Neutral
The company's balance sheet reflects moderate leverage with a debt-to-equity ratio that is stable but requires careful management. Return on Equity has turned negative in the latest period due to negative net income, which is a concern. The equity ratio remains healthy, indicating good asset coverage by equity. Overall, the balance sheet shows potential risks but retains stability.
Cash Flow
65
Positive
Cash flow from operations has been positive, indicating good cash generation despite net losses, with a positive free cash flow to net income ratio. However, declining free cash flow growth rates and high capital expenditures could pressure liquidity if not managed. The operating cash flow to net income ratio is robust, suggesting efficient cash conversion from core operations.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue138.50M137.87M127.76M88.68M70.31M69.52M
Gross Profit59.73M59.06M78.44M72.91M60.82M49.82M
EBITDA-9.92M-9.27M35.57M35.97M30.32M21.70M
Net Income-10.83M-9.98M26.59M26.67M22.17M15.72M
Balance Sheet
Total Assets2.22B2.23B2.04B1.93B1.65B1.64B
Cash, Cash Equivalents and Short-Term Investments233.90M48.92M113.51M111.56M161.74M223.35M
Total Debt72.14M73.04M87.64M172.25M29.29M14.83M
Total Liabilities2.01B2.02B1.81B1.73B1.46B1.48B
Stockholders Equity209.62M207.99M221.52M198.28M188.79M167.66M
Cash Flow
Free Cash Flow8.35M8.95M25.63M25.76M24.82M15.73M
Operating Cash Flow12.55M14.74M31.63M33.54M29.12M17.02M
Investing Cash Flow-103.34M-122.28M-130.75M-228.74M-60.52M-313.79M
Financing Cash Flow168.69M200.73M83.03M232.59M-14.20M339.45M

MainStreet Bancshares Technical Analysis

Technical Analysis Sentiment
Positive
Last Price20.73
Price Trends
50DMA
18.93
Positive
100DMA
17.67
Positive
200DMA
17.69
Positive
Market Momentum
MACD
0.31
Negative
RSI
78.10
Negative
STOCH
99.86
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MNSB, the sentiment is Positive. The current price of 20.73 is above the 20-day moving average (MA) of 18.67, above the 50-day MA of 18.93, and above the 200-day MA of 17.69, indicating a bullish trend. The MACD of 0.31 indicates Negative momentum. The RSI at 78.10 is Negative, neither overbought nor oversold. The STOCH value of 99.86 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for MNSB.

MainStreet Bancshares Risk Analysis

MainStreet Bancshares disclosed 43 risk factors in its most recent earnings report. MainStreet Bancshares reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

MainStreet Bancshares Peers Comparison

Overall Rating
UnderperformOutperform
Sector (65)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
73
Outperform
$125.74M11.378.80%3.11%7.28%-3.91%
68
Neutral
$115.71M20.314.84%8.74%-1.73%
67
Neutral
$146.23M15.956.82%4.27%13.55%3.11%
65
Neutral
kr119.25B25.107.49%4.20%13.90%-82.08%
61
Neutral
$159.70M14.43-5.01%1.93%5.38%-165.79%
57
Neutral
$120.61M24.703.11%1.39%9.61%29.84%
$144.53M28.652.79%
* Financial Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
MNSB
MainStreet Bancshares
20.73
4.84
30.46%
RVSB
Riverview Bancorp
5.75
2.02
54.16%
SBFG
SB Financial Group
19.27
6.05
45.76%
AFBI
Affinity Bancshares
18.32
-1.22
-6.24%
RMBI
Richmond Mutual Bancorporation
14.05
3.07
27.96%
ECBK
ECB Bancorp, Inc.
16.01
3.39
26.86%

MainStreet Bancshares Corporate Events

Business Operations and StrategyRegulatory Filings and Compliance
MainStreet Bancshares Reports Data Security Incident
Negative
May 30, 2025

On May 30, 2025, MainStreet Bancshares, Inc. reported a data security incident involving an outside vendor that was compromised in March 2025. The company determined that the breach affected personally identifiable information of about 4.65% of its customers but did not impact its own IT systems or financial operations. The incident has not had a material impact on the company’s operations or financial condition, and appropriate measures have been taken to notify affected customers and regulators.

Shareholder MeetingsDividends
MainStreet Bancshares Declares Quarterly Cash Dividend
Neutral
May 23, 2025

MainStreet Bancshares held its Annual Meeting of Shareholders on May 21, 2025, where directors were elected for three-year terms, and the appointment of Yount, Hyde & Barbour, P.C. as the independent accounting firm for fiscal 2025 was ratified. Additionally, shareholders approved non-binding advisory votes on executive compensation but did not approve a proposal recommending the sale of the company. On May 23, 2025, the Board declared a quarterly cash dividend on its Series A Preferred Stock, payable on June 30, 2025, to shareholders of record as of June 13, 2025. The Depositary Shares are traded on the Nasdaq Capital Market under the symbol ‘MNSBP.’

Executive/Board Changes
MainStreet Bancshares Discusses Director Nominee Ali Reza Manouchehri
Neutral
May 6, 2025

Mainstreet Bancshares Inc. addressed inquiries about Director nominee Ali Reza Manouchehri, CEO of MetroStar Systems, LLC, and MetroStar’s involvement with the Avenu platform. MetroStar, a digital IT services provider, partnered with Object Computing, Inc. to develop the Avenu platform, with plans to transition the solution in-house by June 30, 2023. MainStreet Bank has not engaged MetroStar since December 31, 2023, and Mr. Manouchehri, who joined the Board on February 21, 2024, has only received standard Board compensation. He brings extensive expertise in technology and innovation to the Board and has been a significant customer and lead provider for the bank.

Business Operations and StrategyFinancial Disclosures
MainStreet Bancshares Reports Q1 Net Income Growth
Positive
Apr 21, 2025

On April 21, 2025, MainStreet Bancshares reported a first quarter net income of $2.5 million, with a net interest margin increase to 3.30%. The company maintained strong asset quality and capital, with total deposits at $1.9 billion and a loan-to-deposit ratio of 96%. Nonperforming loans remained stable, and a successful resolution is expected to pay off $11.2 million in the second quarter. The company decided to halt its Avenu technology initiative to focus on core banking operations.

Financial Disclosures
MainStreet Bancshares Announces Q1 Earnings Call April 21
Neutral
Apr 7, 2025

MainStreet Bancshares, Inc. announced it will hold a virtual webcast and quarterly earnings conference call on April 21, 2025, to discuss first quarter results and recent activities. This event provides an opportunity for stakeholders to gain insights into the company’s performance and strategic direction.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jul 05, 2025